Guest Post: What is the Culprit of the Expected Rise in Fraud in 2012?

There have always been tricksters who take advantage of other people and make money by engaging in fraud. However, there have been predictions that incidences of fraud will increase in the coming year and some experts in fraud prevention and detection have suggested various ways to prevent fraudulent practices. What is it that has prompted these suggestions? Why do they expect fraud to increase?

The Internet

The number of people who use the internet is vast and this creates opportunities for fraudsters who can con or take advantage of innocent users. There are a variety of innovative and creative schemes that at first often seem very plausible to victims.

Examples of Online Scams

Problems caused by the financial crisis and increasing concerns about job security and unemployment dovetail neatly with a series of frauds that have been set up to target those looking for work. For instance, a fraud specialist has reported the ‘career opportunity’ scan. This relates to bogus job adverts posted online. When respondents contact the company, they are offered some form of initial consultation and then asked upfront for a fee for further research (which will never materialise).

Other scams offer business opportunities to people to make some additional income by setting up a business, often by working from home or online. The perceived advantage is flexible working hours. However, the products or services subsequently prove to be worthless. But by the time you have started to try to sell them, you would have already paid an upfront fee to register and spent more on set-up costs.

There are also frauds which involve tricking potential tenants into paying fees to rent a property which, in fact, does not exist (or is not vacant and available). Other internet crimes involve fraudsters who impersonate officials, such as those from HMRC and contact individuals with alleged tax rebates that can only be obtained by handing over banking details and other personal information.

Countering the Scams

The National Fraud Authority is said to be under significant political pressure to come up with a new strategy to combat fraud. Reports suggest that this could be linked to the new Cyber Crime programme and also that it will be necessary to work globally or on a pan-European basis to combat fraud.

Another aspect of internet-related crime is the vastly increased number of e-commerce transactions and the potential for fraudsters to target online purchasers. It has been suggested that key anti-fraud measures which will be needed imminently to counter this include more co-operation in the whole sector and improvements in anti-fraud enforcement services. Specialist payment service providers are also likely to be used more for internet transaction.

Methods of paying online will be made more secure. The USA already has a card chip standard, which doesn’t rely on using PINs, as an online authorisation strategy. Online retailers are likely to continue to use 3D secure solutions to payment problems – that is, using a code and password to complete an online transaction. Various techniques to prevent ID theft are also being developed as this is a growing problem.

This post has been written on behalf of Burton Copeland. Keep updated to stay informed of more developments.

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